Sunday, 13 January 2013

The Sleepless World: One more piece of low hanging fruit?

Update: more detail on the argument and responses to it here and minor edits in this post

Tyler Cowen at Marginal Revolution is a major proponent of the Great Stagnation thesis: that new innovations are not having the same impact on productivity as those we saw in the previous 150 years. Think of iPads versus electricity and cloud computing versus the railroad. Hence, we can expect to see slowing growth in GDP per capita as future productivity gains will take much more effort to unlock. This week The Economist took up this line of thought with a thorough briefing on the subject that broadly agreed with Cowen, although with some equivocation.

Overall, I think the argument has a lot of merit but there may be at least one more piece of low hanging fruit: a vast reduction in our need for sleep.

The American Time Use survey reports that an average American work day includes 8.8 hours of work and 7.6 hours of sleep. Sleep is the second largest single use of time. However, new drugs such as Modafinil appear to vastly reduce the need for sleep without significant side effects (at least so far). Based on anecdotal reports from users, it seems that people could realistically [edit: potentially (see update)] cut their sleep requirements to as few as 2.5 hours a night without a decrease in mental acuity. That gives us another 5 hours to distribute over the day.

Workers would probably prefer to allocate the bulk of that extra time to leisure but I doubt employers will let that happen. Let's make a generous breakdown and give work an extra 3 hours and let workers spend another 2 as they wish. This increases working hours by around 34% and potentially increases leisure time by 80%. This increases the number of hours a worker spends at work from around 1800 hours a year now to about 2,400.

So would this lead to an increase in productivity? That partially depends on how we measure it. If we look at output per worker, then a 34% increase in hours worked would be a substantial boost in productivity and would surely lead to increased economic growth. This alone makes a sleepless world a classic example of low hanging fruit (although it may be closer to an increase in labour force participation than a productivity boost from innovation).

However, there are also reasons to think that output per worker hour may be improved by longer hours. Let's assume that the additional hours worked allow companies to keep the same production with a quarter fewer workers. Why hire four workers for a task, when you can hire the three workers who are most productive to do more hours?

That process would be a major gain for firms. They can hugely reduce costs by spreading the fixed cost per worker over more hours of work. More hours worked shouldn't increase costs of healthcare, training and fringe benefits so the fixed costs fall in line with their reduced workforce.

There are also productivity boosts by lengthening the work day itself in terms of travel time, starting up computers and lunch breaks that we wouldn't expect to increase at the same rate as hours worked. The longer work day may also push forward globalization as workdays overlap for longer periods across time-zones.

Once again though, the gains go even deeper than this. Probably the largest productivity improvement of all will be in human capital accumulation and the returns an individual can expect from it. From the perspective of a student, a sleepless world is an increase of a third in expected working lifespan giving a longer time period for her to benefit from the investment she has made in her human capital. It also means she can potentially finish her education in a shorter time or use the additional waking hours in employment, reducing the opportunity cost of an extended university education.

The sleepless world may finally begin to reverse the age inequality in employment (at least temporarily). Young people will accumulate job experience at a faster rate through more hours of work experience. They may also be more willing to adopt the new drugs than older generations increasing their relative value as employees.

So given the benefits, do we want to grab this piece of low hanging fruit?

The main argument against it is that it will not be a voluntary choice for an individual. If these drugs become widely available then workers who are willing to use them will easily out-compete those who do not. In addition, if the drugs are expensive then it will further increase inequality between those who can afford them and those for whom the price is prohibitive. However, a Google search of various dubious websites suggest the current drugs retail for around $5 a day. At that price, even those working at minimum wage would find it worthwhile to buy the pills.

The final argument against is that a rapid introduction of these pills would amount to an increase in the labour supply and cause a fall in hourly wages or unemployment. However, it's likely that individuals would generally still see an increase in their overall income and their additional leisure time (2 hours extra) would allow this to be translated into an increase in demand in the economy through increased consumption.

Overall the transition to a sleepless world seems beneficial to humanity. There's nothing special about the 7 hours of sleep we get right now and I think people would rightly be opposed to a change that made everyone spend an extra hour asleep every day.

Caveats:

I've never used Modafinil. This is because I don't know where to buy it, I have some moral qualms about using it when the rest of the world is not and because it is still a bit early to conclude that there are no long term health effects;

Some people I've talked to have raised the issue of environmental damage. I think the total environmental impact of a sleepless world could be positive or negative but surely the damage would be lower per unit of output (because there are a lot of fixed carbon outputs per work day such as commuting and building overheads). At the very least, a sleepless world looks like a more environmentally friendly growth strategy;

This argument is premised on the safety of these drugs. Clearly the calculus will change if they are shown to have negative long term consequences;

For those people who already work long hours with little sleep, these drugs should at least make that lifestyle less dangerous. There is convincing evidence that chronic lack of sleep is harmful in normal circumstances;

The precise amount of sleep that a Modafinil user can get by with seems to vary but all sources I've seen suggest it is dramatically lower;

The short term costs of a rapid change might be substantial so gradual adoption is probably preferable from the standpoint of welfare.

I don't think that need for sleep is the only thing preventing people from working more hours. Rather, it's that after a certain point, your brain gets sick of working and becomes less effective at it, even if you're not sleepy. I'm betting that the marginal hours gained from this tactic would be pretty low-productivity hours.

40 hours is most certainly not a biological limit. Very few full-time professionals - physicians, lawyers, CEOs, software engineers - and even traditional workers like farmers very rarely work as few as 40 hours. Physicians in particular are accustomed to working 80 hour weeks (used to be longer, but at least for trainees sub-80 hour weeks have been mandated by accrediting bodies). Rather, 40 hours is the work-week that has been negotiated by labor in America. In other nations (e.g., France), the negotiated work-week is different.

For one literary take on this subject, consider finding an old copy of 'Beggars in Spain,' by Nancy Kress, which games out the results of a society that has genetically engineered some children to forego sleep entirely.

The whole premise is abhorrent, especially in a bid to improve "productivity". If such a thing became common practice it would only be tolerable if we used our extra time awake to do things that we love, not slaving away for some employer (those that wish to spend 80 hours a week creating their own business and making a fortune generally do this already).

Additionally, sleep is pleasant and our complex and strange dreams are the stuff of humanity.

Why is using additional waking time to do things we prefer not to more abhorrent than using our current waking time for this purpose? It'd presumably be better for us to spend our current lives fulfilling our goals too.

I think this article is forgetting (or just unaware) of cognitive benefits of sleep. Sleep is paramount to learning and inspiration, mostly by replaying the events of the day over and over presumably looking for patterns. This takes time and most frequently occurs during REM sleep which barely begins by 2.5 hours. There's no reported evidence that this drug will speed that process as well.

Plus, there are side effects that may be undesirable in the long term. Chronic diarrhea, nausea, and/or headache will eat up any productivity gains. In addition, it's only been in use in 1994; twenty years of use primarily for rare conditions (narcolepsy) is not a good basis to suddenly administer to an entire populace. Lastly, a doctor's oath essentially prevents them from prescribing something that is not medically necessary - so either these would have to be obtained illegally, be prescribed illegally, or the oath changed.

A final thought is that certain countries have legal limits to hours worked (e.g. France). Those laws would also have to be changed for a drug like this to have an effect.

However, while I love dreaming and sleep once I am asleep, a huge problem of mine is willing myself to lay down at bedtime. The idea of maximizing my awakefulness is super interesting :)

I think it's highly likely that workers would just be paid extra in line with the extra hours they (decide to) work. If there was an added benefit to the firms from lower fixed cost per worker then it's an open question whether some of this would be delivered to workers (bear in mind in the long run productivity and wages are closely correlated) but either way the short run sees both firm and worker vastly better off.

We still don't completely understand the physiological and psychological role of sleep--messing around with it in this way could have serious unforeseen consequences, especially over the long term. I wouldn't want this to be the 21st century equivalent of leaded gasoline, something that we only realize is a huge mistake a few generations later.

Having worked retail extensively, most of the employers I have worked for would rather spread their dollars over more part timers than work anyone 40 hours anyway... it has become very hard to work a retail job (a single one!) and make enough money to support your family (for lack of hours)... unless your sleepless world folks are going shopping at my employer with those extra hours I'm not going to see any benefit from it?

This is BS. Modafinil is not the next miracle pill, it is the next Oxycotin. An addictive drug marketed as if it doesn't have side effects by a company with a very strong vested interest in the drug's success.

Armodafinil (basically the same thing as Modafinil) saved my career and possibly my life and the lives of others. Despite getting at least 8 hours of sleep a night and using a CPAP for sleep apnea, I was a zombie. Caffeine didn't help.

I was falling asleep uncontrollably at work and nodding off behind the wheel. I could have gotten fired, or killed myself or others.

My doctor did all sorts of tests but nothing seemed abnormal. As a last result he subscribed armodafinil. Didn't do much, so he upped my dose and that did the trick.

I am literally 100% better with no noticeable side effects.

Of course, with my luck it'll end up causing an untreatable form of cancer or causing heart attack and stroke...

Ditto, but with brand name (Provigil). This recent spate of articles is all silly hype. True, we don't know long term effects on large populations, but even NSAID studies are still producing new information. How long should we wait? For people with sleep disorders, it can be a Godsend. I get no jitters or hyperactivity, just smooth energy and wakefulness and no signs of withdrawal if I don't take it. It's also used for shiftwork with good success. Consider if your doctor in the ER is on her 15th hour of no sleep, wouldn't you rather she be active and alert even if it is chemically induced?

First of all, the usage of prescription drugs is much lower than we are made to believe and lands into the 80/20 rule. The proportion of the population that would take a highly elective prescription drug in order to sleep less is insignificant, and change would need to be catastrophic to have any affect on GDP.

Secondly, time use evidence from many countries also shows that sleep is not necessarily decreasing over time; over the 1990s it decreased in Italy, increased in Canada and Sweden, and remained constant in Germany, Norway and Finland (to name a few). Women tend to sleep a little more than men. Sleep patterns vary on weekends, and those with several kids sleep less than those with fewer or none. People enjoy and need sleep... this isn't going to change.

"workers who are willing to use them will easily out-compete those who do not." Not necessarily.

These drugs may make someone more productive on a daily basis, but wouldn't necessarily make someone more productive on an hourly basis. Maybe more importantly, it is quite possible that those who would choose to take these drugs would be negatively selected. They would likely be taking them to become more competitive, which would be in line with your increasing the labor supply argument.

anyone who has worked in any industry knows that "more production" does not always give you job security...its just giving them more production for the same 40 hrs they pay you...ummm don't we live in a world where most of us work on salary? So what are you really gaining? nothing. furthermore bosses in other countries give drugs to their employees that keep them up...its called Meth and we all know what that does.

However, the "Great Stagnation Thesis" is completely bogus. Every generation thinks that the pace of innovation is slowing -- this is because when you are young you discover a lot more new things because you have millenia of inventions to discover.

The fact is that technology advances a lot slower than people think in the short term, but faster in the long term.

It works. I have never enjoyed this amount of focus and attention to detail. No effect on me apart from absolute focus on everything I did. Business and pleasure. Slept like a log for 5-6 hours a day. Source it outside the UK from a reputable source. I got mine direct from a major international private hospital in Delhi at a cost of £0.11 / pill. Two things: Firstly that I only took it on weekdays so my weekends were very low energy as my body recovered and secondly, no-one knows the long term effects so consumer beware.

1) The 'Great Stagnation Thesis' is based on arbitrary, non-measurable assumptions AND self-referential.But this has been pointed out by others before.

2) You mention long-term safety: Modafinil has been prescribed since the early 90s, so how in the world should anyone know about long-term side-effects of permanent usage ?

3) You argue in terms of effects on aggregate productivity and other related variables. So, you're implying usage of the drug on a very large scale, meaning millions or billions taking it. That means, even those direct side effects considered 'rare' would add up to a very significant number of fatalities.

4) Since most of this is easy to see, and as i am given to understand, you are several DPhil students at Oxford University, i wonder why these considerations are not mentioned in the post and furthermore, why this has been posted at all. Cephalon has already been called to order for marketing their drug as something as harmless as your morning cup of coffee.Yes, there are a few people with narcolepsy. And there are many who just feel tired sometimes, as all working people do. This is no indication for Modafinil.Thus I cannot help but conclude that this is PR, or guerilla-marketing or whatever you may call it. BS it is, definitely (Though I still hope you're just trolling).

According to EU standards set by the EMA, Modafinil is only indicated to treat narcolepsy. In all other cases, risks are considered to outweigh possible benefits.http://www.ema.europa.eu/ema/index.jsp?curl=pages/medicines/human/referrals/Modafinil/human_referral_000236.jsp&mid=WC0b01ac05805c516f

> This is trivially true of everything from computers to aspirin to caffeine. Why is this an argument either for or against modafinil use?

First, we can still decide not to use Modafinil like caffeine, aspirin etc. Then, as pointed out by recent examinations by the EMA, side effect-wise, Modafinil is not comparable to Coffee or Aspirin.

I do not really know about the reliability of either FDA or EMA or how they can ensure some degree of independence.Recalling issues like aspartame, or more recently, that monsanto-corn-story, the only way to be honest about this is by admitting that we don't know for sure. You cannot apply the same methods you might successfully use for analysis of, say, gambling or radioactive decay to problems far more complex.If you don't know the risk of using a drug and don't need this drug either, you should be err on the side of caution.

This is my opinion, just as this> How deeply sad and paranoid.is yours

> According to EU standards set by the EMA, Modafinil is only indicated to treat narcolepsy.

Based on the same sort of reasoning as the FDA, and on the same side-effect information: for example, the skin rash side effect has an occurrence measured in per million users, and the psychiatric stuff is as rare or rarer. (Which leads to the interesting flip side of your rare-effect point: when the side-effects are this rare, how do you tell that they're modafinil-caused and not just randomly happening or covariant with modafinil prescription?)

> Then, as pointed out by recent examinations by the EMA, side effect-wise, Modafinil is not comparable to Coffee or Aspirin.

You're right, they're not comparable. Far more people die every year thanks to aspirin than modafinil.

> Recalling issues like aspartame, or more recently, that monsanto-corn-story, the only way to be honest about this is by admitting that we don't know for sure. You cannot apply the same methods you might successfully use for analysis of, say, gambling or radioactive decay to problems far more complex.If you don't know the risk of using a drug and don't need this drug either, you should be err on the side of caution.

So, you're just peddling FUD. (In the real world, we *do* apply those methods to all sorts of other problems, and that's why we have the modern world.)

> This is my opinion

Your opinion is to go around accusing bloggers or grad students of dishonestly accepting pharmacorp money to write propaganda about their drugs, based on no evidence other than that they didn't knee-jerk conclude that the drug must be dangerous and not deliver any compensating rewards?

You forget one simple fact that people still need to eat food. If you're sleeping only 2 hours in the night you'll have to eat healthy and more often. You can't just allocate more hours to work and assume more breaks aren't needed either. Now people will get an hour for breakfast and an hour for dinner? Add in all those extra breaks and what you thought was 10-11 hour workday is really practically the same as if someone worked 9-5 with an hour lunch break. Labor laws exist and will not suddenly lax to allow for exploitation of labor thus it will hardly benefit any business to have employees work a full extended day.

In fact what is more realistic is for well qualified people to take on extra work and less skilled people to be pushed out of the labor force as the supply of qualified workers increases during non standard working hours.

The thinking in this piece is profoundly inhuman and sad. It seems to be based on the absurd but widely held idea that the only thing worthwhile in life is producing output for money, to increase that worshiped figure, the GDP, which according to the fairy tale economists love to tell, is a good measure of well-being.

If the goal is to increase overall human well being, it would be far better to legislate a shorter work week than to medically enable a longer one. A shorter work week would allow the vast majority of workers more leisure and better health and would reduce unemployment and job-insecurity-related stress.

If we had an utterly free-market economy (which thankfully is currently non-existent) and working long hours on minimal sleep became the norm, it would be a human tragedy of epic proportions, as many workers would find themselves forced to work longer hours to survive, while many other workers would find themselves unemployed and destitute.

The 40-hour work week is not a "choice" that workers make because they can't work any longer. Workers used to work much more than 40 hours a week, without the benefit of Modafinil, until, thanks to unions, work weeks longer than 40 hours were made illegal. This was progress, not a mistake. Europe has made further progress, with work weeks in some countries of 36 hours or less.

If individuals find Modafinil's effects useful and want to do more work or spend more waking time at leisure or whatever, more power to them. But envisioning this drug as a means of increasing the supply of labor is just sick.